Ultrabooks vs. Apple iPad - Really a Contest?

Tech guru, Tim Bajarin points out that Intel isn't moving a lot of Ultrabooks and thinks the difference is in pricing, with consumers losing interest once you cross the magic $599 price point and move into the $699-$899 (and higher) range. He also says people are interested in the Apple iPad when you get into the $699 range, but I'm willing to pick a bone with him about the either/or of a laptop and tablet.

Bajaran, president of Creative Strategies and a long-time fixture at CES, addressed pricing in "Why Ultrabooks have been slow to take off" in a blog posting. Intel and its partners have spent a lot of money pushing Ultrabooks for consumers and businesses, but the cheapest Ultrabook starts at $699 and is a "relatively low powered system" with most models falling into the $799 to $800 range. Business users are "OK" with higher pricing, but his analyst firm believes many want power and features that can't be crammed into thinner laptops -- I can agree with that, since people love larger dimension screens, for example.

Research suggests the "mid-market" for laptops priced at $699-$899 is going away, with either users going with lower-cost models on the one hand or buying laptops with more powerful features in the $999 to $1299 range.

He also says the Apple iPad is sucking out interest for laptops in the $699-$799 range as people compare prices between (one implies) a fully loaded iPad and a mid-range laptop, equating the two.

I think consumers and businesses want both: A lower-cost laptop with Ultrabook features (light and thin, battery life up to 8 hours) for real work and a tablet for leisure, travel, and light work (e-mail, presentations). Lugging a laptop everywhere -- especially in the office between meetings -- gets old. And it's the same model with consumers in many ways, as people want a full-featured and full-keyboard laptop to do work (i.e., word processing, photo storage/editing, taxes) while having a tablet for travel and while on vacation. You don't want to do a lot of work while traveling, but you do want to keep up on e-mail.

Consumers will likely buy in increments, first getting a tablet in the $300-400 range and then a replacement laptop at $599 if they need it. Otherwise, they'll invert the purchase (replacement laptop first, then tablet for leisure). What this means is there's the potential for hardware manufacturers to actually make more money by selling tablets and laptops -- if they don't overprice laptops.

The bigger question is if Ultrabooks will continue to retain their higher pricing over the next three years, or start slipping downward if Intel adjusts pricing on its chips and components for the thin, lightweight machines. I'm betting it does, because it has stuck its neck out with manufacturers in promoting the Ultrabook concept and nobody wants to see a failure.